Sunday night, when Apple announced that it was going to be holding a conference call the following morning regarding its plans for its massive cash pile, the internet ran wild with speculation.
While this outcome might have appeased investors, it left some of us wanting more. Here’s what I think the company should do with its money…
I’m obviously not an economics mastermind, but indulge me for a minute. What if Apple used some of its cash to purchase a controlling stake in its largest manufacturing partner, Foxconn. Yeah, you heard me. Foxconn.
Just think about it. This would allow Apple to control its own manufacturing costs, not to mention the costs of its competitors. Remember, Samsung, Amazon, and other companies use Foxconn to build their products too.
Apple could also use the new weight to take control of Foxconn’s labor problems. The manufacturer has dragged the iPhone-maker along with it through a firestorm of criticism over the past few years due to repeated reports of poor working conditions. And this would give Apple the chance to make things right.
As crazy as all of this sounds, it’s actually not unheard of. The move is called “backward vertical integration.” It’s when a company takes control of one or more of its upstream suppliers that contribute to the production of its products. A good example would be if Mercedes owned the companies that made the tires and glass it uses to make its cars.
For what it’s worth, Apple’s stock buyback and dividend program is fairly minimal compared to its overall cash balance. So the company is obviously keeping a lot of money around for something. The question is, what?
What do you think Apple should do with its money?